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Volte Corporation produces small electric appliances. The following information is available fo $ 2.60 per direct labor-hour 25,300 units 34,700 Standard variable overhead rate Actual output Actual direct labor-hours used Standard direct labor-hours Actual direct labor cost incurred Standard direct labor-hour rate Actual variable overhead incurred Actual units sold 1.5 per unit $ 839,000 $ 26 97,500 $ 20,280 units

Volte Corporation produces small electric appliances. The following information is available fo $ 2.60 per direct labor-hour 25,300 units 34,700 Standard variable overhead rate Actual output Actual direct labor-hours used Standard direct labor-hours Actual direct labor cost incurred Standard direct labor-hour rate Actual variable overhead incurred Actual units sold 1.5 per unit $ 839,000 $ 26 97,500 $ 20,280 units

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Exercise 17-20 (Algo) Prorating Variable Overhead Cost Variances (LO 17-1) Volte Corporation produces small electric appliances. The following information is available for the most recent period of operations: $ 2.60 per direct labor-hour 25,300 units 34,700 1.5 per unit Standard variable overhead rate Actual output Actual direct labor-hours used Standard direct labor-hours Actual direct labor cost incurred Standard direct labor-hour rate Actual variable overhead incurred Actual units sold $ 839,000 $ 26 $ 97,500 20,280 units Volte never has any work-in-process inventories and began the year with no finished goods inventory. Required: a. and b. What was the variable overhead price variance and the variable overhead efficiency variance for the period? c. Assume that Volte writes off all variances to Cost of Goods Sold. Prepare the entries Volte would make to record and close out the variances. d. Assume that Volte prorates all variances to appropriate accounts. Prepare the entries Volte would make to record and close out the variances.
Transcribed Image Text:Exercise 17-20 (Algo) Prorating Variable Overhead Cost Variances (LO 17-1) Volte Corporation produces small electric appliances. The following information is available for the most recent period of operations: $ 2.60 per direct labor-hour 25,300 units 34,700 1.5 per unit Standard variable overhead rate Actual output Actual direct labor-hours used Standard direct labor-hours Actual direct labor cost incurred Standard direct labor-hour rate Actual variable overhead incurred Actual units sold $ 839,000 $ 26 $ 97,500 20,280 units Volte never has any work-in-process inventories and began the year with no finished goods inventory. Required: a. and b. What was the variable overhead price variance and the variable overhead efficiency variance for the period? c. Assume that Volte writes off all variances to Cost of Goods Sold. Prepare the entries Volte would make to record and close out the variances. d. Assume that Volte prorates all variances to appropriate accounts. Prepare the entries Volte would make to record and close out the variances.
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